Few if any businesses haven’t been impacted by the Covid-19 pandemic. With so many affected, it’s no easy task for the Government to save them all.
The State has been rightly praised for being quick off the mark in introducing measures such as the wage subsidy scheme to help companies cope during the lockdown. It announced an additional €6.5 billion package of supports for businesses last weekend.
One area that has been overlooked, however, is the start-up community. New figures published this week show that even before the coronavirus pandemic, funding for early-stage companies was drying up.
The data, which comes from the Irish Venture Capital Association (IVCA), shows funding for start-ups in the €1 million to €5 million range fell by 44 per cent in the first quarter to €38 million. Deals valued at under €1 million were down 39 per cent to €8.4 million, while those priced at between €10 million to €30 million were down by a third to €58.2 million.
These figures are concerning. And they don’t reveal the full impact of Covid-19, which only hit late in the quarter.
The IVCA warned that deal volumes could be down by as much as 50 per cent this year as funding dries up. It argues that a generation of start-ups could fall by the wayside unless given additional financial support.
With lobby group Scale Ireland also warning that up to 80 per cent of early-stage companies could run out of cash within six months, it seems obvious we could lose promising companies that could become the next Stripe or Intercom.
The Government may love promoting Ireland as a tech-savvy nation but often fails to follow up with concrete measures to ensure indigenous companies survive and thrive. This is in sharp contrast to countries such as France, which at the start of the pandemic quickly rolled out some €4 billion in supports for early-stage companies.
While every business is clamouring for help, it’s crucial to remember our future as an innovation hub hangs in the balance.